Friday 9 January 2015

Buy to let deal of the day - 6.9% yield in Surbiton.

Today we're going to look at something which can really bring in the cash! I came across this 4 bed flat in Surbiton which is in decent condition and in a high demand location. 

  

Now I wouldn't normally recommend a 4 bed flat as a single let as there's not that much call for it on the open market. If someone wants 4 beds then they'll invariably go for a house. However there is another way and that is to market it as a multi-let to 4 individual people. Surbiton is a great area for young professionals so in order to maximise the appeal for this market I would be throwing a good £10k at this place to fully spec it out and put it right at the top end of the market. 

This is currently being rented out as a whole for £1900pcm but I think the landlord is missing a trick. By renting the rooms individually you will be able to demand between £600-650 per room per month. And don't forget, this helps to lower your exposure to expensive void periods as if someone serves you notice and moves out then you only have one quarter of your investment empty, not the whole thing.

So, lets look at how the figures stack up....Its on the market for £425k so worse case scenario, you get it for the asking price and spend the max of £10k on it. Lets say, for the sake of argument, you get £600pcm for 2 rooms and £650pcm for the other 2 rooms. That puts your gross income at £2,500pcm with an investment of £435k. Your gross yield would then be 6.9%. Anything you can get off the asking price and refurb costs is, of-course, a bonus.

Multi-lets are not for the faint-hearted though so if you're new to the game then I suggest you using a decent agency to manage it for you and to make sure you're fully compliant with all regulations. Someone like me, for example! ;o)


Rebecca Smith

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